Virgin Australia this morning announced the suspension of all international flights from 30th March to 14th June 2020. The Virgin Australia Group also announced a domestic capacity reduction of 50% until the 14th of June 2020 (the equivalent of temporarily grounding 53 aircraft).
This comes after a flight cancellation policy change announced on Monday the 16th March, which means Virgin Australia travellers can now cancel their booking in return for flight credits, to be used – free of the usual ‘modification’ charges’ – at a later date.
Per the Virgin Australia press room: “The Virgin Australia Group is providing guests with more options to change their bookings, as a result of new travel restrictions implemented by governments in light of the evolving COVID-19 situation.”
The key change is that Virgin Australia and Tigerair guests can now change their flight to a later date and/or to a different destination, without incurring a change fee (you will just need to cover the fare difference if the value of their new fare is greater than the original). This applies to domestic and international travel between now and 30 June 2020 for existing and new bookings.
Also significant is that, if travel is within four weeks, Virgin Australia and Tigerair guests can also cancel their domestic or international travel without incurring a fee and receive the full value of the booking as a flight voucher in their Travel Bank, valid for 12 months.
Of the new policy, Virgin Australia Chief Customer Experience Office Danielle Keighery said: “We understand that these new restrictions may affect guests’ travel plans. This is why we’ve removed change and cancellation fees so guests can have more flexibility with their upcoming travel.”
“We want guests to have peace of mind when booking with us, and this flexibility will extend to any new bookings made for travel between now and 30 June.”
Virgin are also requesting that, due to the higher than normal call volumes, only guests with flights booked to depart in the next 48 hours contact the Guest Contact Centre and the airline’s social media team (changes to international flights booked from 12 March can be made through ‘Manage My Booking’).
Virgin also attempted to ward off any possible confusion with the following information.
- Guests with flights booked through a travel agent will need to contact their travel agent to change their booking
- Guests will still be required to pay any applicable fare difference or taxes should the same booking class/fare not be available on the date they wish to rebook
- There is a maximum of two changes per international booking and a maximum of one change per domestic booking for guests thinking about changing their travel plans
More broadly speaking, as the crisis worsens, it will be interesting to see which, if any, airline steps up and actually offers customers something more than credit. Given the state of the travel industry at the moment it could be a smart move to secure customer loyalty down the track, but also financially catastrophic.
It will also be interesting to see how airlines manage their funds in the future. Though Qantas and Virgin Australia are known for being more fiscally responsible than some of the airlines across the pond, considering the government is likely to give them a hand if they really do look like going under, now may be the time to demand more of their budget iterations (Jetstar and Tigerair) as part of a bailout ultimatum.
A recent article in the New York Times, entitled “Don’t Feel Sorry For The Airlines” makes some interesting points which could be applied to Australia (though, less harshly, as both Qantas and Virgin Australia, from our experience treat their staff and customers better than American).
Referring to the mid to late 2010s (the years during which American reached such levels of financial success that its chief executive proclaimed, “I don’t think we’re ever going to lose money again”), The op-ed writer said, “There are plenty of things American could have done with all that money.”
“It could have stored up its cash reserves for a future crisis, knowing that airlines regularly cycle through booms and busts. It might have tried to decisively settle its continuing contract disputes with pilots, flight attendants and mechanics. It might have invested heavily in better service quality to try to repair its longstanding reputation as the worst of the major carriers,” the op-ed continued.
“Instead, American blew most of its cash on a stock buyback spree.”
Once the dust settles on the current COVID 19 pandemic, let’s make sure this doesn’t happen here.